North Indy News

U.S. Senators Todd Young (R-Ind.) and Ruben Gallego (D-Ariz.) have introduced the Uplifting First-Time Homebuyers Act, which aims to assist Americans seeking to purchase their first home by increasing the allowable tax-exempt withdrawal from Individual Retirement Accounts (IRAs).

Currently, first-time homebuyers can withdraw up to $10,000 from their IRAs without facing a 10% early withdrawal penalty, a provision established in 1997 when the median home price was $115,000. Despite significant increases in housing prices since then, this cap has not changed.

The proposed legislation would raise the qualified distribution limit to $50,000. This increase is intended to reflect current housing market conditions and allow more individuals and families access to funds needed for buying, building, or rebuilding their first homes.

Senator Young said, “Homeownership is critical to strengthening families, building generational wealth, and cultivating stronger communities. By updating the IRA withdrawal limits to better match the realities of today’s economy, our bill will unlock more opportunities for Americans to become homeowners and invest in their future.”

Senator Gallego added, “Homeownership is the cornerstone of the American dream, and for good reason. Owning a home is a proven way to build generational wealth and retirement security. But too many young Americans feel like that dream is out of reach. By updating the decades-old IRA homebuyer exception to reflect the reality of housing costs today, this bill helps make homeownership possible for the next generation.”

The bill has received support from several organizations including the National Housing Conference; National Community Reinvestment Coalition; National Coalition for the Homeless; National Association of REALTORS; National Association of Hispanic Real Estate Professionals; Mortgage Bankers Association; and Chamber of Progress.

Shannon McGahn, Executive Vice President & Chief Advocacy Officer at the National Association of REALTORS said: “The Uplifting First-Time Homebuyers Act is a smart, targeted step toward making homeownership more attainable. By updating the outdated IRA withdrawal limit, this bill could give first-time buyers greater access to their own savings at the moment they need it most. With the median age of first-time buyers now at 38, this commonsense fix helps more Americans achieve the dream of homeownership earlier in life—and start building equity and long-term financial stability.”

For further details about this legislation or its full text visit here.